India-US trade deal will expand cotton demand, benefit farmers: Piyush Goyal

NEW DELHI: The India-US trade arrangement will expand cotton demand rather than hurt domestic growers, commerce and industry minister Piyush Goyal said on Friday, while asserting Indian farmers stand to gain from rising textile exports.

"This will also not hurt our cotton producers... I can see before my eyes a huge requirement for more cotton and a huge and wonderful future for our cotton," Goyal said at the ET NOW Global Business Summit.


Explaining the mechanism, he said India will get the same concession that Bangladesh enjoys. "The same concession is available to India also. It's called a yarn forward. If you buy cotton or yarn from the US and process it and use it for making garments, you are able to export it to the US at zero duty. That's an established principle of theirs. And India will benefit from the same way of working," he said.

Goyal also said the reduction in US reciprocal tariffs from 50% to 18%, along with access at zero reciprocal for textiles in Europe, has made Indian exports significantly more competitive. "We become extremely competitive. Let us convert this market access into market share," he said, projecting strong growth in sectors such as textiles, leather, footwear, handlooms, handicrafts and marine products.

He said recent free trade agreements finalised by India have been structured to protect sensitive sectors, while expanding export opportunities. In the US deal, key agricultural products such as rice, wheat, corn and millets have been kept out to safeguard the interests of farmers. Similarly, India has not opened the dairy sector in any of its trade agreements, the minister said, noting that millions of small farmers depend on it for supplementary income.

Goyal also said India has concluded nine free trade agreements in the last three-and-a-half years with 37 developed economies, effectively opening up access to over 70% of global trade. These pacts, he said, are aimed at providing certainty and predictability for businesses, attracting investment, creating jobs and integrating India more deeply with global markets.

"There has never been a country that became developed while remaining insulated from the global economy," he said, adding that India's calibrated opening up is designed to balance consumer interests, farmer protection and export-led growth.

On the issue of imports, where India and the US are eyeing $500 billion of shipments over five years, Goyal said, India needs coking coal to boost its steel production and the US is a major supplier of this commodity. "...with the US, we are hopeful to get more aeroplanes into the country, which would be good for our tourism, which would be good for our mobility and hopefully bring down the airfares for all of us... It should open up remote area connectivity into the country," he said.

"Very easily I can see before my eyes, just the aviation sector, meeting probably a hundred billion dollars of imports - Boeing planes, aircraft engines and spare parts in the next five years." Goyal said India has used trade pacts to secure advantages such as investment commitments and better terms for Indian professionals abroad. FTAs, he said, are not just about tariffs but about "trust, transparency and time-bound certainty" that attract investment.